U.S. agriculture registered a $35 million trade deficit in March, the first time the sector has seen imports outpace exports since August 2006, according to the Latest US Agricultural Trade Data released by USDA's Economic Research Service (ERS).
The deficit arose as U.S. ag exports for March were valued at $10.314 billion against imports of $10.349 billion for the $35 million shortfall. In February, U.S. agriculture registered a $1.097 billion surplus as exports were valued at $10.654 billion against imports of $9.558 billion.
March ag imports are the second highest on record, behind only the $10.616 billion mark set in March 2015.
The monthly deficit of $35 million is the first since the $34.276 million deficit registered in August 2006, and the largest deficit since April 2006 when it was $149.114 billion. U.S. agriculture posted three monthly trade deficits in fiscal 2006.
The rise in imports of agricultural products is somewhat surprising given that overall trade data in March showed imports down 3.6% compared to February while U.S. ag imports rose 8.3% compared to February while exports declined 3.2%. Overall U.S. exports fell 0.9% compared to February.
Cumulative fiscal 2016 ag exports stand at $67.239 billion while imports total $56.817 billion, leaving a trade surplus of $10.513 billion. Compared to this point in fiscal 2015, U.S. ag exports were valued at $78.791 billion while imports were valued at $56.808 billion for a cumulative surplus of $22.163 billion.
USDA's most recent US ag export forecast released in February called for exports to be valued at $125 billion against imports of $118.5 billion for a $6.5 billion trade surplus. USDA will again update their outlook May 25.
Comments: Through six months of fiscal 2016, US ag exports are some 7.5% above the mid-point of USDA's export forecast, while imports are just over 4% under the midpoint of the forecast level. US ag export values have fallen every month but February in fiscal 2016, which could keep USDA's export forecast close to on the mark. The value of imports has been the highest each of the last two fiscal years in the March-April period. That continues to indicate that the May 25 update of the U.S. ag trade forecasts could feature a reduction in the level of forecast imports which would boost the forecast trade surplus. As now has been seen in March, more monthly red trade ink cannot be ruled out.